BAE Systems’ US subsidiary agrees $36 million ITAR settlement

17 August 2026

BAE Systems, Inc., the US subsidiary of BAE Systems plc, has agreed to pay a $36 million civil penalty to settle 104 charged breaches of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR).

BAE voluntarily self-disclosed the breaches. The Directorate of Defense Trade Controls (DDTC) charged conduct between May 2019 and March 2025. The charges include 38 unauthorised exports of technical data to China, a proscribed destination under s126.1 ITAR. Section 126 sets a policy of denying licences and approvals for exports of defence articles and services to listed countries. BAE also exported technical data without authorisation to Canada, the UK and Germany. It furnished defence services without authorisation in France, Italy and Indonesia, exported a defence article to Switzerland, and retransferred technical data to an unauthorised UK supplier.

BAE must pay $18 million to the US. DDTC suspended the remaining $18 million on condition that BAE applies it to remedial compliance costs. It did not impose debarment, citing BAE's voluntary disclosures, cooperation and compliance improvements. Debarment would have barred BAE from ITAR-regulated exports.

The consent agreement runs for 3 years. BAE must appoint a Special Compliance Officer, strengthen its compliance procedures and training within 6 months, implement an automated export compliance system, complete an export control jurisdiction review within 6 months, and undergo at least one external audit.

The proposed charging letter said BAE's own disclosures identified insufficient written procedures, inexperienced trade compliance staff, inadequate management of agreements and insufficient systems to track authorisations.

See our US export control pages for more information on DDTC enforcement.